Updated at 9:20 a.m. Wednesday
Shakopee school officials on Monday night addressed an elephant in the room: the district's working relationship with ICS Consulting, the construction management company from which former superintendent Rod Thompson pleaded guilty to soliciting bribes.
Thompson was convicted Nov. 16 of soliciting nearly $50,000 in home renovations, sporting event tickets and hotel stays from ICS, the company managing the $102 million Shakopee High School construction project, which is in its end stages.
Though ICS was not named in court documents, it was named in federal court the day Thompson pleaded guilty, prompting school officials to temporarily pause the district's relationship with the company.
On Monday, the school board pressed "play" on that partnership by approving an agreement with ICS and its parent company, Building Systems Holding.
"Even though everything appears in order, Building Systems Holding, ICS Consulting and Shakopee Public Schools are continuing their efforts to make completely sure this is the case," Superintendent Mike Redmond said at the meeting. He repeated the statement twice, emphasizing that no irregularities were found in an initial review of the district's financial interactions with ICS.
Key aspects of the agreement include:
- ICS will pay up to $15,000 toward the cost of an independent audit to review contracts between the company and the district. The audit will examine whether ICS fees are within industry standards and whether there are irregularities with any reimbursable costs or fees billed by the company. If irregularities are found, ICS will remedy them.
- ICS will not bill the district the for a total of $218,725 — $72,000 of which are outstanding fees on the project. At the end of the project, if the district is satisfied with the work of ICS, it can opt to pay ICS up to 50 percent of the total amount that was not billed. To date, the district has paid ICS $2.28 million in fees for the high school project, according to the agreement.
- ICS will stop billing reimbursable costs (like mileage and on-site trailers) from this point forward on the high school project. To date, the district has paid ICS $136,178 in reimbursable costs, according to the agreement.
- ICS will continue providing services as the owner representative of the high school project, but Wold Architects and Engineers and school district officials will provide additional oversight and supervision through completion.
BSH President Arif Quraishi said his company acquired ICS just one month before the FBI began investigating the activities of a now former ICS employee and Thompson.
Along with cooperating with the FBI, Quraishi hired a former federal prosecutor to conduct an internal investigation of ICS. Based on the two investigations, it was determined the employee did not do anything illegal, but did breach the company's code of conduct and behave unethically, Quraishi said. The employee is no longer with the company as of September, though he had been removed from project work prior to that.
“Arif (Quraishi) from ICS recognizes the cost incurred by the school district," Redmond told board members. "He is also very committed to rebuilding trust … and in restoring the good name of the company he purchased in June of 2017.”
Board members commended Quraishi for taking extra strides to mend the business relationship and complete the high school construction project on time, especially given the circumstances.
“The project is on time, which is fantastic. And under budget," Redmond said.
“We were just as alarmed as everyone else was (to learn ICS was involved) because we didn’t have any advance knowledge of anything," board chairman Scott Swanson said to Quraishi. "Thank you for what you’ve agreed to do and also going forward, that’s a testament to your leadership as well.”
Quraishi said the employees that worked on the project "put their heart and soul" into their work and the recent news of Thompson's conviction was tough to swallow. One of them quipped that despite the "black eye," he's proud of his work on the high school addition, Quraishi said.
“I’m really proud of the team that worked on the high school project, and I'm excited we can continue to work on this school and provide a quality school to the community for a long time to come," Quraishi said. "None of the people that are working on this project had any involvement with this issue. We did do an investigation on all of them, too."